FGV Annual Report 2012

97 F i n a n c i a l S t a t e m e n t s 2 0 1 2 P e n y a t a K e w a n g a n 36 FOREIGN EXCHANGE RESERVE The foreign exchange reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. 37 REORGANISATION RESERVE The reorganisation reserve represents the difference between the fair value of the purchase consideration and carrying value of the net assets acquired arising from the acquisition of plantation estates. The movement in the reorganisation reserve is as follows: Group 2012 2011 RM’000 RM’000 At 1 January 2,347,742 2,400,784* Movement of reorganisation reserve during the year prior to effects of LLA – effects of recognition of: – Plantation estates profit (Note 21(c)(vii)) – 1,251,458 – Movement in capital contribution to a significant shareholder # – (1,304,500) – (53,042) Effects of LLA (Note 21(c)(x)): – LLA liability (5,842,694) – – Amounts due to a significant shareholder (54,690) – – Deferred tax assets 1,460,673 – (4,436,711) – (2,088,969) 2,347,742 * This represents the net equity comprising the assets and liabilities of the plantation estates as at 1 January 2011, as described in Note 54. # Capital contribution to a significant shareholder represents net cash flows arising from the operation of plantation estates for the comparative year, deemed to be a net capital contribution to FELDA following the application of predecessor method of accounting as disclosed under financing activities in the consolidated statement of cash flows from the financial year ended 31 December 2011.